We Moved Back Home
Like many companies in today's global economy, particularly in the information technology
industry, Decision Design was lured to "think globally" about its labor sourcing and decided
to establish an offshore development center in India. With the advent of innovative workforce
technologies, web-based software, and high speed communications, having an offshore work center
appeared to be an excellent fit with our continual push to keep costs competitive and deliver
high quality services. Leveraging the time zone difference seemed like an attractive opportunity
to provide our clients an even higher value-add to our offerings. With the well publicized
$20/hr labor costs and programming talent as good as in the U.S., who could argue?
After researching and interviewing companies, we partnered with a multi billion $ firm in
Delhi. We established a core group of project managers, developers, and QA resources. We developed
specialized tools to communicate tasks, progress, and technical development environments. We had
regular project meetings with the team in Delhi to ensure that communications were as strong as
they could be. We regularly went to India to ensure that our project teams were working well together.
All appeared headed for success.
But we never got there. It just didn't work. So we pulled the plug.
After the two year initiative, we learned many things about working in an offshore relationship.
We discovered what other companies are now beginning to discover; that costs were not low in
reality and the quality of the delivered software was terrible. At least for the type of work
we do, offshoring was a failure.
What is Homeshoring?
Homeshoring is about bringing task-centric, cross-functional development teams together in
small groups where our developers work in close proximity. Homeshoring development centers
are located away from the higher rent, higher labor areas of the U.S., providing significant
cost savings over San Jose, Boston, L.A., or NC's Research Triangle. Homeshoring providers build
and use high speed, high productivity-producing development technologies that support using
lower cost resources around the country. Homeshoring uses resources in the U.S., resources
that understand U.S. business, culture, and work ethics. Decision Design's Homeshoring model
requires minimal travel, labor, training and project management costs that are often required in
Our Homeshoring strategy allows us to deliver savings from 30% to 60% below onshore development
costs. And we are dead-on cost competitive with offshore or blended offshore/onshore companies.
Why Offshoring May Not Work For You
On the surface, the logic for offshoring seems simple and straight forward: a U.S. software
engineer in Silicon Valley will earn $80-120K per year while an offshore equivalent may earn $30-50K.
Pundits continually state that low labor costs in India, China, Vietnam, and the Philippines,
translate into 50%-plus savings for application development and technology support services.
Unfortunately, for many companies the reality is much different. Hidden costs and differences
in operating models are significantly altering cost expectations. Additionally, timelines and costs are
exacerbated by serious problems with quality control, knowledge transfer, cultural differences and employee
turnover. And the biggest problem of all? Low rates do not equate to low cost. High productivity
operations like we have at Decision Design ensure that work is performed in half the time of many
developers in offshore centers. This fact alone wipes out the touted 50% savings.
In the end, our poor experience with offshoring was about the quality of the software. We
just could not accept the poor quality coding, testing, and delivery. Our clients were not
happy and our onshore developers were continually having to rewrite the offshore code. It
wasn't written properly, efficiently, and for the long term. The bugs were difficult to fix
and the products were difficult to enhance. And this was from a CMM Level 5 rated company!
(CMM observers, beware)
When Offshoring Works
As detailed in the articles and resources in our Knowledge Center and from our extensive first
hand experience, there are certain situations that benefit from offshoring.
First, offshore development resources need tight specs, tight project management, and fully
defined projects. Offshore resources are not good at change and are not good at figuring out
what needs to be done or what makes good business sense in any particular situation. They are
best when tasks are uncomplicated and straightforward. Projects that are not fully defined
ahead of time will fail to exhibit offshore cost advantages.
Second, commodity or routine tasks, tasks for which inductive reasoning, continual change, or
business expertise are not necessary may be good candidates for offshore centers. Data conversions,
PeopleSoft to SAP conversions, perhaps even a C++ to Java conversion project would be a good candidate.
Call centers and Help Desks are frequently cited as good examples for offshoring since they require little creative or adaptive processes
(though even those can present some customer backlash).
Finally, large corporations invested for the very long haul, willing to work through the complex
issues they face with an offshore initiative can make offshoring successful. Organizations looking
for a short term bang on a short term project (less than 12 months), will most likely see higher
cost and lower quality by taking the offshore route.
We can Rescue a Failed Offshored Project
As a pioneer leader in Software Remediation (rescuing failed software projects), Decision Design combines its proven Remediation Services Methodology with its unique Client Services Methodology to help clients bring their failing offshore projects back to one of our Homeshoring centers in the United States. From there, projects will be worked through the software production cycle, as detailed in our
Client Services Methodology. Our remediation
methodology and our experts in code diagnosis and code repair will quickly bring your software up to
our high standards.
For more information on Decision Design's HomeShoring approach, contact us via email at
firstname.lastname@example.org or 847-940-9200.